Credit Reporting History - Information to Credit Bureaus
Who's Responsible for Correctly and Accurately Reporting Your Credit History?
Last Updated: February 18, 2016
Have you ever wondered how all that information appears on your credit report? Better yet, who is responsible for making sure the information on your credit report is accurate and correct? That is the million dollar question and you are not alone in wondering how this whole credit history gathering process takes place.
There are two entities responsible for reporting your credit history, the credit bureaus and the company reporting your pay history, the information furnisher. Companies who report such information can be credit card, mortgage or auto loan companies. The credit bureau account information can only be as accurate as the information it is provided by the information furnisher. However, a credit bureau oftentimes can take correct information and report it incorrectly.
Over the years, the Federal Trade Commission has seen a reduction in the number of complaints received relative to inaccurate information on credit reports. Even though complaints have decreased, recent surveys, by numerous news sources, have found that 25 percent of credit reports contain inaccurate data serious enough to deny someone credit and 70 percent of credit reports contain some kind of inaccuracy. While it's true the large amount of data the credit bureaus handle makes it difficult to stay on top of things, the credit bureaus are for-profit corporations who could be doing more with their profits to make sure that the data they have is accurate.
The FACTA legislation, passed in 2003, allowed consumers to directly challenge the information furnishers about information contained in their credit reports. It further stipulated that the FTC must come up with rules detailing how disputes with information furnishers must be carried out. Seven years later, in 2010, the FTC has finally published rules for information furnisher disputes. The new rules took effect July 1, 2010.
For instructions on how to dispute directly with the information furnisher, read this article on what is known as the 623 method.
Before the changes to the FCRA, consumers were not allowed to dispute negative information on their credit report with anyone but the credit bureaus. Only the most heavily wronged consumers actually fought back against the banks for refusing to correct inaccurate reporting to the credit reporting agencies.
During the period 1997 to 2002 before the laws took place, consumers had to expend money, time and resources in order to fix problems stemming from inaccurate information furnisher reporting. The burden of proof and the costs gathering this proof fell on the consumer.
No letter better illustrates this than the following, submitted by Denise Richardson, who gave me permission to publish this letter and her name. Fleet Mortgage (now Bank of America), reported an inaccurate mortgage foreclosure on her credit report. Since writing this letter, Denise successfully sued Fleet Mortgage, Equifax, Experian and TransUnion and won a substantial sum of money. Her goal was not only to clear her credit report, but to change the Fair Credit Reporting Act, and we think she may have actually influenced the FCRA reforms.
Denise's letter has not been modified or edited in any way.
In 1988 we took out a Mortgage with a Bank. Upon settling a dispute, at this time in 1994, my husband and I paid off this mortgage, a mortgage of which we never missed a payment nor have we ever been late in making a payment. We received the Discharge of the Mortgage, which was promptly, duly recorded in the appropriate Registry of Deeds. Approximately 1 year later we were contacted via telephone and mail that we would be foreclosed on if this same mortgage (that was paid off) was not brought up to date as they alleged we owed three months payments. I contacted Sen. Rosenberg, whom at that time was the Chairman of the Banking Commission, who in return contacted the Legislative Banking Liaison to contact this bank to get this straightened out.
I then received a letter from the bank telling me that they were correcting their error and their computers to reflect it was their error and forwarding notices to all appropriate credit bureaus. More than a year or more lately this bank was sold to another National bank.
Several months later, While my husband and I were in Florida we attempted to co-sign a car for my stepson. We were told that we had exceptionally good credit except for a "mortgage write-off" to this same particular large bank. To our shock we had to explain we never had a write-off. Upon returning home I contacted the bank immediately and received notice faxed back which stated "Bank error" correcting this erroneous information and said they were faxing to all credit bureaus. We again thought it must be finally corrected and finally over.
Months later we tried to co-sign for a car for my daughter. To our horror, amazingly, again the same scenario happened. Turned down for "mortgage Write-off"! I immediately contacted the bank representative that had sent me the last letter and he told me it was NOT their fault that they had wiped my name out of their system and that it had been corrected. I disputed reports with the credit bureaus and bank in writing insisting that they review my documentation (i.e. Mortgage discharge) and delete the inappropriately re-inserted erroneous information and reflect my dispute.
Approximately, in June of 1997 my husband answered an offer for free gas if he applied for a BP Gas credit card. He applied. Our incredible response was "Turned down for mortgage write off". When I received the notice I immediately contacted the bank rep. once again and was told in no uncertain terms, NOT to contact him again, as he was not responsible for the erroneous information! I wrote for credit reports and found again not only had the bank re-reported but also they had added an additional "Mortgage write-off " which had reflected another account number and they unconscionably had inserted and reflected alleged actual dates in 1996 they claimed were 90-day late payments (i.e. March 1996, 90 days late and October 1996, 90 days late).
At this point it implied we had two mortgage write off's to this particular bank with two different account numbers and several 90-day late payments on each.
More re-investigations and disputes were done and one credit bureau indicated they corrected and removed it off our report. One bureau sent a letter back stating "after our investigation with the furnisher we found the information to be correct". Incredibly they only removed the additional, duplicated mortgage write-off which contained a different account number! More disputes and re-investigations with hopes this would forever and finally be corrected.
On or about August, 1998 we received a demand letter from a collection company who stated they "purchased" our mortgage "debt" from this bank and they were demanding over $21,000 plus accrued interest. We were horrified. We disputed the erroneous information over the telephone and in writing and we continued to receive notices that demanded payment and indications they would "take any available remedies to collect this debt". During one phone conversation they stated they had requested a second investigation from the furnisher because the bank never responded within the required time limits imposed on them by law and they still had not responded to their first request. In fact, the women their told me that if what I was telling her was true, they by law should not be reporting this information, should not be contacting us and they never should not have "sold" them this non-existing debt.
To my shear terror again, when I received new credit reports, this new Collection company was now additionally listed on our reports as bad debt, in collections and reflected another mortgage write off. At this time, being emotionally and physically drained, I went to an attorney, as I could no longer handle the enormous anxiety and emotional distress. This whole nightmare has taken its toll on both my husband and myself.
What I learned next was equally as frustrating and overwhelmingly terrifying. I learned that even though the congressional purpose behind the Fair Credit Reporting Act (FCRA) Statute was to ensure that consumers were protected from inaccurate credit reporting, it's amendments have caused the opposite effect! Section 623, as amended specifically bars consumers from suing furnishers of information and only allows enforcement of the statutes regulations by the Attorney Generals office and the Fair Trade Commission. Upon contacting both offices I was told to contact and attorney, as they could not handle individual complaints only class action cases.
After exhausting my ability to get the furnisher of this information or the credit bureaus to listen to me and take corrective measures to prevent further damage to our credit reputation, I find I am forced into expensive litigation against 5 major corporation. The laws that are supposed to protect consumers apparently have huge gaping loopholes that the paid bank lobbyists apparently were successful at including in the FCRA making it impossible for consumers to obtain the intended protection.
My attorney sent the bank a Massachusetts Chapter 93A letter (unfair and deceptive practices) in November putting this bank on notice that they had 30 days to respond and demanding them to clean up our credit. Their written reply received back stated our credit "has been cleared up and has been cleared up since mid December". I have a letter dated Jan. 9th, 1999 where my husband was again humiliated and turned down for a lower rate credit card even though we have exceptional credit other than this erroneous information. Incredulously, even though they had been properly put on notice in November that their errors were continuing to effect our reputation, unconscionably in Jan, 1999 they had not taken any effective measures to correct their actions. Further, our latest credit report dated January 19, 1999 showed their errors were compounded.
On Jan. 29, 1999, we received the credit report update requested. Not only did it still reflect the incorrect derogatory information and the bank's "mortgage write offs" but it now included an inquiry from this bank who had apparently requested a copy of our credit report without our permission and without a permissible purpose. They incredibly and recklessly reported their purpose for obtaining our report as "collection purposes"! We were mortified, humiliated, and shocked that this bank would disregard our rights yet again. We felt further victimized with two additionally unnecessary inquires (the bank and credit card company) which not only affects our credit history but of equal importance, our credit "Risk Score" for future loans and interest rates. Scores are calculated based on inquires as well as your good/bad credit history. We had already supplied them the info they needed to correct this information. They did not, have a need to request a credit report especially under false and misleading pretenses and should have known this would negatively impact our credit.
By our attempting to obtain a loan or credit cards under these circumstances it only compounds the problem by further damaging our credit due to the fact that our credit reports will continue to acquire additional inquires and therefore further lower our credit rating! We have been paying higher interest rates on our current credit cards due to their errors and can not obtain nor consolidate to a lower interest rate loan or credit card until they correct and notify all companies and credit bureaus involved.
Our only option now is forced litigation against the bank, Collection Company and the three credit bureaus. I should not be forced into expensive litigation and endure their acts of defamation when we are innocent consumers that have done nothing wrong. We are trying to gain the attention of the legislators to correct the laws that were created to protect us from the effects of inaccurate credit reporting and hold furnishers accountable for their willful and negligent actions that ruin our reputations. The FCRA says we can sue credit bureaus but not the furnishers, yet it is the furnishers that provide and report the inaccurate information. The credit Bureaus blame the banks and the banks blame the credit bureaus and the consumers are put in the position of having to prove their innocence and defend their destroyed reputations.
The congressional purpose of the FCRA is to protect us from this egregious behavior yet they take away our access to the courts and our right to sue "furnishers". The FCRA should, at the very least, should delineate penalties and fines when they do not adhere to the regulations. We are totally innocent yet we have to now endure long, expensive litigation against 5 large corporations just to receive what all consumers should expect and deserve accurate credit reporting.
I am committed to changing the FCRA by getting Congress to hear the pleas of the consumers and to raise consumer awareness to the injustice of the Fair Credit Reporting Act. If you can help me with this endeavor, I would be very grateful.
Thanks and Best Regards,